Overbuilding is not really a new phenomenon ...
I bought investment property in Houston in the late 70s :(

The way I see it, they only overbuilt housing because they felt
they could unload plenty of product with "creative financing".
That's called oversupply ... subprime was only the currency.

Regarding the dependancy and use of equity in our homes,
don't get me wrong, it will definately have a negative effect
on our economy 'cause we've used up our "credit Card" limit.
But that's actually a different issue than the subprime matter
which more directly realates to the value of ones home.

If we keep subprime alive, and keep house values rising,
our credit cards will never, ever have any limit at all!

Makes a lot of sense. Thanks.

And it makes you feel any better, I bought my first home during the "boom" of 1989 in a middle of nowhere subdivision. Now that was a smart investment.

Took a very cold, harsh bath on that one.

Will the real problem at Baja please identify itself
 

Lets not get this topic and thread to far off target. Sure the economy is reeling a bit and the disposable income purchases will take the first HIT, but thats not the problem here. lets think about whats really going on here !
The problem, as I see it, is Mercury's -Brunswick's marketing and market domination tactic of buying (most of the time) troubled boating companies and using their controlling interest or outright ownership to guaranty their engines, equipment and systems will be in and on these boats free of competitive pressure or competetion.
Look, it does not take a rocket scientist to see their strategy. Actually its worked quite well for them as they have about 80%+ market share in our industry.
The problems for companies such as Baja and others and possibly ultimatly even Fountain is that Brunswick ownership is not commited or directed at fixing whats really wrong with these companies as any good committed ownership should do !
Instead I believe they are just interested in how many units (Power with a boat)) they can get to market with their name and profits guaranteed. Not a unusual corporate tactic by current US Standards and practices. But what does it do long term for the health of these companies so owned, not much, and it apparently intices companies like Baja to possibly push too much product with ISSUES out the door and lets little real profit contribute to that subsideries bottom line. When the walls start quak'in and the potential losses look to big and the liabilty exposure is to big to stay in the Game, they Bail ! and the industry gets another financial "Black Eye".
They bring Fountain and Reggie in as what appears to be a carefully directed attempt to take the direct heat off of their (mistakes ?) and make it look like something great is being created, a few small percentage sale of the key and only value assets from the "Ashes" that will take the focus of of the real "F***up.
Kind of sad that one companies profit and market domination strategy may ultimatly become the undoing of an entire industry!
Think about it ! My guess is they (Brinswick) will be in the life boats before any of the passengers are allowed to jump in !

Sounds exactly like the oil fiasco we have now!

I think Reggie is a smart guy, with alot of experience. He has endless of enthusiasm for the compnay and product that he has developed - with his name on it.

I reckon that Brunswick is behind the decision to move Baja over to NC. They are holding the financial reins at Fountain, if I´m not mistaken. Both companies are suffering from over capacity and this is an elegant solution for both sides. One company (Fountain) can now cover a broader market.

Reggie has probably turned down the suggestions in the past to produce lower priced, smaller boats saying that it would damage the image of Fountain as a high performance boat manufacturer. Taking on Baja makes it possible to deliver 20 - 30 foot recreational boats, creating numbers and turnover that reduces the cost conponents and parts from outside suppliers.

If I am right, it will be the Outlaw line that will be cut, maybe only retaining the three single engined models, if at all. This theory is backed up by the cancellation of the Poker Run Tour, that only served to promote the Outlaw, and bigger, blue powered models, that compete with Reggie´s products.

If this is the price of survival, then so be it. It is, however a big shame for the Outlaw line that has brought so many boaters into the performance circle.

In the short term, I would think chances are good that they would still be making boats in Bucyrus...for at least a little while. Ramping up production in NC to handle another couple hundred boats would take some time, and Reggie would be silly not to see what concessions he could wrangle out of the local politicians in terms of tax abatements, etc. before committing to any course of action.

Governor Strickland's people are practically tripping over themselves trying to figure out ways to keep businesses in Ohio. What they--and the local pols need is a "heads-up" so they at least have a chance to put some kind of incentive package together. Surprise announcements like this make that impossible. Maybe it's like they say - it ain't over til it's over...

I suspect that determining the "terms" of the sale of the Baja
assets to Fountain would be the best clue as to Baja's future.

If the deal was simply a "paper" transaction, then there is a
strong probability that this is actually a survival consolidation,
and does not bode well for either brands development.

If actual cash equivilents changed hands, then this transaction
could better be viewed as an investment by Reggie in the Baja brand.

Nonetheless, it will be an interesting development to follow :cool-smiley-011:

Old enough to own an apache:D

Getting married in May

Yes I have a family

No mortgage

I'll admit my first post was pretty fn stupid in light of things. But you and everyone else need to reliaze that not everybody rakes their employees over the coals in a corporate buyout. The M&A guy already admited to that. Ultimately its up the the owners or shareholders. None of you know the specifics of their severence. I doubt the janitor will get anything, but everyone I've known who has gotten one was more than happy. And like another person metioned a buyout severance will be a lot better than nothing through bankruptcy. I will stand by my statement, if someone buys the company I work for and they give me a severance package I will be very happy and consider it a sweet deal. But I also know how to market myself and it wouldn't take me long to find a new job paying more so it would be a win-win for me. I'd consider it their loss and move forward. You can look at the glass half empty or half full.

If any baja employees are offended by my statement - I apoligize and I've taken down my previous post. My tip for you - take everything you read on OSO with a grain of salt.

Yup. Just cuz you read it on the internet doesn't make it true :D

WTF? :p:hitfan: